Share:
POST
TWEET
SHARE
SHARE
EMAIL

D2C revenues expected to surge say Brand CMOs

By Chris Dawson September 15, 2021 - 8:00 am

Where do you buy your next KitchenAid mixer now that Debenhams has gone? This is a question that many manufacturers are asking and you probably haven’t missed the deluge of ads on the telly box from brands offering incentives to buy direct or with additional freebies if you place an order without a middleman retailer also taking a cut. A five year surge in D2C revenues is expected and the COVID-19 pandemic led many to invest in their own sales channels, according to new research.

Brands might try to sell to you through TV ads, on marketplaces, or social media and their own website, but all of this is what constitutes D2C revenues. The difference is you’re buying direct, regardless of the platform, and the brand is cutting out the middleman retailer.

ChannelAdvisor and CensusWide surveyed 304 CMOs working at UK brands selling online. 97% of CMOs say that D2C channels have become a higher priority for their brand since the start of the COVID-19 crisis — more than a third (34%) say it has become a significantly high priority.

What proportion D2C revenues do you expect over the next five years?

  • Nearly half (46%) of CMOs said 21-30%.
  • 17% of CMOs said they expect D2C channels to deliver 31-40% of their brands sales over the next five years
  • 16% expect D2C to be responsible for 41-50% of their brand’s sales.

Nearly half (47%) of brand CMOs say their brand is selling more products through their own channels, such as their website or online marketplaces, compared to before the COVID-19 crisis. 48% say they are selling more through retailers, while just 6% say they are selling roughly the same portion of products between retailers and their own channels than before the COVID-19 crisis.

Even as restrictions have lifted and shoppers return to shopping instore, many brands are confident that D2C will deliver even in the short term. 43% of CMOs said they expect D2C channels to generate increased sales over the next 12 months.

Beyond the D2C revenues opportunity, CMOs are also excited about the other benefits D2C offers their brand. 47% said that over the next 12 months, D2C channels would give them more control in how their brand is generally portrayed online, while 42% said a significant benefit would be the added control over how their brand’s product details are described online. 43% said they are excited about the valuable first-party data that D2C will offer their brand over the next 12 months.

The Future of Retail Diplomacy

By wielding more power over their own sales, 90% of brand CMOs believe their brand is now in a stronger negotiating position with retailer partners than before the COVID-19 crisis began — 27% say they are in a significantly stronger position. None of those asked said they believed they were now in a weaker position.

Brands have seen how data-driven strategies for both marketing and sales are required to thrive in the new e-commerce dominant landscape, so now expect much more from their retail partners. 57% of CMOs say the data shared by retailers is very useful, while 42% say retail partners share some useful data but they would welcome more.

Yet even in this new era of retailer relationships, some brands have concerns. More than a third (38%) of brand CMOs said that managing retail relationships would be their biggest challenge over the next 12 months. Many had specific worries around the lack of control in how their products are marketed. 44% said that inaccurate pricing is their main area of concern when listing on retailer websites, while 42% worried that their products will not be easily discoverable by consumers.

“The last 18 months have sparked a D2C revolution and brands selling online now find themselves wielding more power than ever before. Higher than average D2C revenues were to be expected while retail shops were closed, but this research shows that brands believe their own channels will continue to drive significant revenues in the long term. In addition to the revenue opportunities, CMOs are excited to harness valuable data from their own channels that can be used to better understand and serve a new wave of savvy, post-pandemic online shoppers.”
– Mike Shapaker, Chief Marketing Officer, ChannelAdvisor

Have your say

View our Comment Policy

Featured in this article from the Tamebay Guide – companies that can help you grow and manage your business.

ChannelAdvisor

ChannelAdvisor is a leading provider of cloud-based e-commerce solutions that enable retailers and branded manufacturers to integrate, manage and optimise their merchandise sales across hundreds of online channels

See More Companies >

Recent Comments

12 hours ago
Jonty: @Rob Royal Mail to fine customers if the over declare weight. Just about says it all...
16 hours ago
Rob: I spoke to RM last week about this because like others I always add a...
19 hours ago
Daz: Royal Mail.... this is starting to become very tedious, has anyone looked at the dedicated...
20 hours ago
James: Yes I was wondering this as we have mostly sub 100 grams, we put more...